October 30, 2012

Ghost In Romney Tax returns

It is puzzling why Romney refused to release his tax returns beyond 2010 and 2011. One would think the grief he put up with by not releasing an additional three years of returns is greater than anything showing up on the returns. I had an epiphany where the above rationale would not be accurate.

Romney had a close relationship with Goldman Sachs while heading up Bain. Goldman was involved in the subprime housing boom and bust over the last decade bringing down the economy. They profited by creating subprime loans, bribing credit rating agencies such as S&P and Moody's to give an investment grade rating on the securities, securitizing the loans and selling them at huge profits. Then, when the economy collapsed Goldman was bailed out by the government while the consumer got nothing.

Per Opensecrets.org Goldman employees contributed more than $990,000 to Romney's bid for the presidency. Since Romney was a big client of Goldman it would be natural to recommend Romney buy these high yielding, highly rated investments. When the subprime business was collapsing it would also be natural for Goldman to tip off Romney that he should be unloading these securities. This would have occurred in 2008 and 2009 and show up on his tax returns.

I have no idea whether this is true because I have not seen Romney's tax returns. However, if it is true this would be a valid reason for Romney being so adamant about not releasing earlier tax returns. His hands would be dirtied by the housing crisis and he could be accused, along with Goldman, of insider trading.